Eligibility of deduction under section 80P(2(a)(i) - denial of claim on interest income towards jewel loan and other loan on the ground that the purpose of loan issued was for commercial activities and not for agricultural activities - Held that:- We uphold the orders of the Commissioner of Income Tax (Appeals) in allowing the claim of the assessee under section 80P(2a)(i) of the Act on the interest income on jewel loan and other loans and reject the grounds raised by the Revenue in all these ap .....

facts and various decisions considered above, we do not find any infirmity in the order of the CIT(Appeals). - Decided in favour of assessee - I.T.A.Nos.27 to 30/Mds/2015 and C.O.Nos.21 to 24/Mds/2015 - Dated:- 17-4-2015 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER. Appellant by : Dr.Nischal, JCIT Respondent by : Mr. S.Sridhar, Advocate ORDER: All these appeals are filed by the Revenue against separate orders of the Commissioner of Income Tax (Appea .....

ssessee submits that the issue in these appeals is squarely covered by the decision of the co-ordinate Bench of this Tribunal in the case of ITO Vs. M/s.Veerakeralam Primary Agricultural Co-operative Credit Society in ITA No.197/Mds/2013 dated 11.02.2014 and in the case of The Salem Agricultural Producers Co-operative Marketing Society Ltd. Vs. ITO in ITA Nos.730 to 732/Mds/2014 dated 30.06.2014. 3. Departmental Representative places reliance on the orders of the Assessing Officer and the ground .....

o-ordinate Bench of this Tribunal in the case of ITO Vs. ITO Vs. M/s.Veerakeralam Primary Agricultural Co-operative Credit Society in ITA No.197/Mds/2013 dated 11.02.2014 and the decision in the case of Karkudalpatty Primary Agricultural Co-operative Credit Society Ltd. Vs. ITO in ITA No. 292/Mds/2014 dated 17.03.2014. On going through the orders of co-ordinate Bench of this Tribunal, we find that the issue in appeals is squarely covered by the decision of this Tribunal in the case of The Salem .....

l produce loan and on the pledge of gold jewels and silver articles, earned interest income only as per the objects and submitted before the lower authorities that the claim of the assessee has to be considered under section 80P(2)(a)(i) of the Act. 3. This issue has been considered by Income Tax Appellate Tribunal, Chennai B Bench in the cases of SL(SPL)151, Karkudalpatty Primary Agricultural Co-operative Credit Society Ltd and S 1382, Mullukuruchi Primary Agricultural Cooperative Credit Societ .....

he Tribunal found that definition of members includes associate members , as well. The Tribunal found that such nominal members also enjoy statutory recognition as per the State Co-operative Societies Act. The Tribunal further observed that the objections of the Revenue that members define d in sub-clause (i) of section 80P (2) should only include voting members, would amount to a classification within classification which is beyond the purview of taxing statute; unless provided specifically by .....

d the submissions made by the representatives of both the sides. We have also perused the orders of the authorities below as well as the decisions on which the ld.AR has placed reliance. The assessee is an agricultural co-operative credit society registered under the Tamil Nadu Co-operative Societies Act, 1961. The assessee-society was established in the year 1968 and the members of the society are agriculturists. The primary activity of the society is accepting deposits from its members and adv .....

tive agricultural and rural development bank . Explanation to section 80P further defines Co-operative Bank, Primary Agricultural Credit Society and Primary Co-operative Agricultural and Rural Development Bank. The same reads as under: Explanation.-For the purposes of this subsection,- (a) co-operative bank and primary agricultural credit society shall have the meanings respectively assigned to them in Part V of the Banking Regulation Act, 1949 (10 of 1949); (b) primary co-operative agricultural .....

-operative bank and Primary Agricultural Credit Society shall have the meanings assigned to them under the Banking Regulation Act, 1949. We find that the issue whether credit co-operative societies are same as cooperative banks has been dealt in detail by the Bangalore Bench of the Tribunal in the case of ACIT Vs. M/s.Balgalore Commercial Transport Credit Co-operative Society Ltd., (supra). After comparative analysis of the co-operative banks and co-operative societies on various parameters, the .....

Tribunal in the cases of ITO Vs.The Kasipalayam Primary Agricultural Co-operative Bank Ltd., (supra) and ITO Vs. M/s. Yeswanthpur Credit Credit Co-operative Society Ltd. (supra). The assessee has also placed reliance on the recent judgment of the Hon ble Gujarat High Court in the case of CIT Vs. Jafari Momin Vikas Co-op. Credit Society Ltd.,(supra) wherein the Hon ble High Court after taking into consideration the CBDT Circular No.133/07 has held that sub-section 4 section 80P will not apply to .....

, irrespective of the fact that the respondent would not fall within the expression primary agricultural credit society. 6. Had this been the plain statutory provisions under consideration in isolation, in our opinion, the question of law could be stated to have arisen. When, as contended by the assessee, by virtue of subsection(4) only cooperative banks other than those mentioned therein were meant to be excluded for the purpose of deduction under section 80P, a question would arise why then Le .....

to your letter No. DCUS/30688/2007, dated 28.03.2007 addressed to Chairman, Central Board of Direct Taxes, on the above given subject. 2. In this regard, I have been directed to state that subsection( 4) of section 80P provides that deduction under the said section shall not be allowable to any cooperative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. For the purpose of the said subsection, co-operative bank shall have th .....

entral Board of Direct Taxes. 7. From the above clarification, it can be gathered that sub-section(4) of section 80P will not apply to an assessee which is not a co-operative bank. In the case clarified by CBDT, Delhi Coop Urban Thrift & Credit Society Ltd. was under consideration. Circular clarified that the said entity not being a cooperative bank, section 80P(4) of the Act would not apply to it. In view of such clarification, we cannot entertain the Revenue s contention that section 80P(4 .....